1 week Ago By Ari Yanover
With record-breaking temps and the popularity of air conditioning soaring in Alberta, the province’s energy grid is literally hot and cold and moving to a “double peak” system. That’s according to Joel MacDonald, an economist and the founder of energyrates.ca .
The hourly demand in July 2024 was above the previous summer demand peak on 73 occasions. In the new scenario, the new summer peak demand of 12,221 megawatts in 2024 was just 163 megawatts shy of the winter demand peak of 12,384 megawatts set in January 2025. “Where we used to see a big gap between and we wouldn’t even call it a summer peak, now, the summer peak is just 163 megawatt short of the winter peak,” MacDonald said, noting demand on the Alberta grid in July 2024 was five per cent higher than the demand in July 2023.
“This means we need more generation assets to supply power more frequently throughout the year. All other things being equal, we are going to need more power plants to offset this second peak,” he said. Alberta’s peak demand has traditionally been in the winter, he said.
“Think back 10 or 20 years, not that many people had air conditioners,” MacDonald said. “Only over the last few years have we seen a second peak start to develop almost as large or as great as our winter peak in the summer. Our overall grid profile has shifted from one of this one winter peak to an unusual case of winter peak and a summer peak.
” St. Albert-based realtor Lauren K. Hunt said air conditioning is growing in popularity among homebuyers, and while not a deal-breaker because people can have it installed, it’s increasingly considered an attractive bonus feature for a home on the Alberta market.
“When I’m shopping with people, when you tell them the house has A/C, they’re like, ‘Woohoo!’ and they’ll pay more for it if it’s the same house side by side and one has air conditioning and one does not and it’s a little bit more money, then they’re like, ‘It’s worth it,’” she said. You got the power Lest Albertans be considered weather wimps, temperatures have been truly on the rise, with each summer’s news cycle including record-breaking highs around the province. A grid system is all about balance, planning supply to meet demand and having the generation assets to ensure downtime for maintenance.
For the Alberta Electric System Operator (AESO), that means some intense planning. “When you’re sizing a grid system, you’re looking to size it at a comfortably higher supply level than the peak demand, and anytime the peak demand is changing or increasing, that means we need more generation to offset that increase in demand,” MacDonald said. Depending on consumer trends and other factors, MacDonald believes that in the years to come, the province’s top summer demand could eclipse winter’s.
According to AESO, Alberta’s energy assets are rising to meet the increased demand. “With respect to the summer forecast, given the recent addition of ~1,700 MW of new gas generation, we believe that there are no reliability concerns and that there is enough supply to reliably manage the grid through the summer,” said Richard Goldberger, senior communications adviser for AESO. The company’s latest Long Term Adequacy report provides a monthly supply cushion forecast for the upcoming year, Goldberger said.
“The supply cushion metric shows how much extra electricity is forecast to be available in Alberta each day to meet the highest demand. It’s calculated by subtracting the peak demand from the total electricity supply but only includes power from current generators and approved projects. Thanks to this new generation in 2024, the supply cushion has grown significantly compared to previous years,” he said.
Supply and demand set the price Albertans have three ways to purchase electricity: competitive retail contracts, fixed rates, and floating rates. “In times of high demand, we tend to see the spot price, the floating rate of electricity, go very high. With a competitive retail floating rate agreement during a peak demand period, a double peak could mean the times of year where you’re paying very high pricing happen twice as often,” MacDonald said.
AESO recently announced that they are reviewing and potentially resetting the Energy Offer Cap, increasing it above $999 a megawatt hour to $3,000 a megawatt hour, MacDonald said. “When we’re talking about the grid, we tend to talk of dollars per megawatt hour — $999 per megawatt hour is the same as 99.99 cents a kilowatt hour.
“If the energy offer path increases from 99 cents a kilowatt hour to $3 a kilowatt hour, then those on a floating rate agreement, potentially could be paying three times higher a price per kilowatt in these peak demand periods.” It’s a “catch-22,” MacDonald said. “A few years ago, we started to see some brownouts.
We didn’t have enough supply in peak demand periods. Unfortunately, peak demand, even if it’s just happening a couple times a year, generators aren’t really incentivized to build power plants if they’re only contributing to the grid five days or 10 days a year. “So we have to have the peak price that they can ask during those peak demand periods increase to incentivize them to build generation assets to supply the grid in those peak demand times,” MacDonald said.
“So the question starts to become, in peak demand periods, do you want to pay higher prices or potentially have no power? Unfortunately, there’s not always a great solution. We would all want cheap pricing all the time, but that’s not always an option.” How to tinker with your electric rate An estimated 40,000 residential consumers use MacDonald’s website every month to compare and find the lowest residential electricity price.
The basic strategy for the average residential consumer is competitive retail fixed-rate products, as the competitive retail floating rate agreements are volatile, with customers paying five cents a kilowatt hour one month and 28 cents the next, he said. “Right now, there are many competitive retailers that are offering rates around the eight cents per kilowatt hour mark, and these are fixed rates,” MacDonald said. “It’s going to give you cost certainty.
You’re going to know roughly how much your bill is each and every single month, and you’re not going to worry about your energy bill doubling or tripling any given month over the long run. These fixed rates actually do tend to average slightly less than the floating rates.” In Alberta, most long-term competitive retail contracts can be exited with no fee and 30 days’ notice.
“The strategy is to find the lowest retailer that you’re comfortable with and sign up for a fixed rate. Stay up to date to what the market price is, and in six months, if you happen to see a lower retailer advertise a price, you can provide your notice to your existing retailer and sign up for that one,” MacDonald said. RelatedAlberta premier's office receives unanimous negative feedback on Danielle Smith's PragerU visitFormer Alberta cabinet minister calls government health contract probe ’whitewashing’ Bookmark our website and support our journalism: Don’t miss the news you need to know — add EdmontonJournal.
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